Oliver Hemsley, the founder of stockbroking firm Numis, has set his sights on a bold new venture, he tells Rachel Bridge at Drax
Oliver Hemsley is a man on a mission. After a career spent helping companies to float on the Stock Exchange, the founder and former CEO of stockbroking firm Numis has decided to run a stock exchange of his own. He is hoping to buy Nex Exchange, currently part of Nex Group, and turn it into a credible rival to the AIM market.
Nex Exchange, formerly called Plus Markets, was originally launched as an alternative to AIM but currently has just 85 companies listed on it, including premier football club Arsenal and English wine maker Chapel Down.
The reason that Oliver is keen to take it on is simple. As a lifelong champion of the benefits of public listing, he wants to bring back the buzz of excitement and achievement that used to surround the process of publicly floating a business, but which he feels has been lost under increasing layers of bureaucracy and regulation.
He says: “I think it has been a great mistake to make listing publicly an unpleasant experience that terrifies people. That needs to change. At the moment people think, I don’t want to face that, and that’s wrong. I want to bring back the sense of achievement around floating a business. We are going to try and make it popular to come onto the public market. I want a listing to be something for companies to consider seriously.”
Oliver points out that at the moment selling to private equity can be a far more attractive route for businesses than undertaking an IPO, because of the greater freedom it offers.
He says: “Private equity has grown exponentially versus the stock market over the past few years as there is less public scrutiny, fewer rules and regulations and more flexibility. Unlike public companies, businesses in private equity are not second-guessed in what they do and they don’t suffer quarterly or half yearly reviews by analysts or a constant focus on executive remuneration.”
While there is a role for both options, it would be a real loss if companies are continually deterred from publicly listing, he says.
“We want to encourage companies to go onto the stock market because that gives private investors and public market investors a chance to invest in more high quality companies. Ultimately as a country, we don’t want to have fewer companies listing because then it effectively becomes a process of adverse selection, where mediocre and poor quality companies remain on the market and the good dynamic businesses which are going to make money go and raise money privately.”
He points out that there are now just 1600 companies fully listed on the London Stock Exchange compared to almost 3000 in 1999.
Oliver says that despite the regulation and red tape, there are still many attractive reasons for a business to publicly list. The key is for them to enjoy the process and to really understand the advantages it can offer.
As an example, he says: “Having a range of investors as opposed to a single controller can be an advantage to a management team. Public company investors, if well treated, only want to talk to management every six months, if that, and that leaves plenty of time to run the business. If you do well for investors you can effectively control your own destiny without owning the whole company.”
He adds: “You have to use the stock market to your advantage which is all about under promising and over delivering and managing expectations. You have to understand the game.”
Oliver started Numis as a private client business in 1999 and subsequently turned it into an highly successful corporate stockbroking business before stepping down in 2017 after 25 years as CEO. Its clients include more than 50 FTSE 250 companies and it has a total of over 200 corporate clients.
Drax Sector Lead: David Bushell
Partner, Business Services
Tel: 020 3949 9572